Kraft Heinz, Unilever scrap merger deal
$ 143B union would have been 3rd largest
Kraft Heinz has decided to withdraw its bid to merge with Unilever, scrapping a $ 143 billion deal that would have been one of the biggest in corporate history, the companies said Sunday.
Unilever’s continued resistance to the tie- up led condiments giant Kraft Heinz to abandon plans aimed at blending two companies that have a global footprint but face an uncertain future at a time when U. S. consumers are turning toward natural products and growth in emerging markets is slowing.
“KraftHeinz’s interest was made public at an extremely early stage,” said Michael Mullen, spokesman for Kraft Heinz. “Our intention was to proceed on a friendly basis, but it was made clear Unilever did not wish to pursue a transaction. It is best to step away early so both companies can focus on their own independent plans to generate value.
“We remain focused on driving longterm value while always putting our consumers first.”
A combination of Kraft Heinz, the company behind Oscar Mayer meats and Maxwell House coffee, with Unilever, whose brands include Lipton tea and Dove soap, would have been the thirdlargest corporate tie- up of all time, according to S& P Global Market Intelligence.
Only the mergers of Mannesmann with Vodafone and Time Warner with American Online would loom bigger.
But Unilever rejected the offer from the start, saying that the price Kraft Heinz was offering was too low.
At the time the proposed deal was confirmed, Unilever said that it saw “no merit, either financial or strategic, for Unilever’s shareholders.”
If the merger had taken place, it would have been the latest undertaken byWarren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital, which orchestrated the combining of Kraft and Heinz in 2015, and together own 51% of themerged company.
Sunday, the companies said that “Unilever and Kraft Heinz hold each other in high regard.”